39 thoughts on “Twiggy”

1. AZDavidPhx November 25, 2009 at 4:33 pm

   This Beautiful Juliet’s Balcony Home will Capture the Romantic and Sophisticated Feelings Inspired by those who Embrace the World Around Them

   WTF does this mean? Seriously.
   1. Chris November 25, 2009 at 5:06 pm

      They’re inviting all the Romeos to bid on this POS.
   2. give agent a break November 26, 2009 at 12:03 am

      Give agent a break, he/she is just trying to appeal to the buyers’ sense of ostentatiousness. He/She assumes that buyers, with money enough to buy this house, have huge egos.
      1. Chris November 26, 2009 at 11:27 am

         A used Ferrari/Lambo would do the trick. No need to pluck 7 figures on this POS.
2. dethman November 25, 2009 at 4:53 pm

   i personally like the ‘gourmet kitchen with too many upgrades’ hehe
   1. Alan November 25, 2009 at 8:36 pm

      Yeah, that caught my eye and brought a smile. A flower of truth, poking up above the fertilizer.
3. AZDavidPhx November 25, 2009 at 7:39 pm

   Is everyone ready to go shopping for stupid $hit that they don’t need this holiday season? The ‘merchants’ (WTF is this World of Warcraft or something?) are praying to their Christmas Jesus that you will be dumb enough to throw your money away on pointless gifts this year that serve no purpose other than to wank the shareholders of retail outlets.

   We are about to enter a very ugly 2010 and they are telling us to shop. Notice all the economic misinformation being put there just in time, telling us how everything is getting better.

   I hope that this year, people will finally say ‘enough is enough’ and hand Christmas back to the religious and free themselves from the social manipulation to engage in gratuitous and wasteful shopping and spending. Of course we know that they won’t; nobody wants to be seen by their friends as too poor to shop.

   I actually think we could see increased wasteful spending this year as the unemployed and bankrupt double down and charge up their credit cards to pretend that they are not affected by their loss of income. They can just quietly declare bankruptcy next year when the bills come due which is far less embarrassing.

   I will not be shocked one bit when the media begins reporting ‘Better Black Friday Sales Than Predicted!’. You know it’s coming and you heard it here first. The bulls are about to throw us a holiday party, get out your taxpayer brooms for next year when it comes time to clean up the mess.
   1. newbie2008 November 25, 2009 at 9:03 pm

      Amen to giving Christmas back to Jesus.

      What do the merchants do on Christmas?
      Gather arount the cash register and sing “What a Friend We Have in Jesus.”

      What kind of ecomony do we have based on buying things we don’t need?

      Time to end the too big to fail model with fees and bonus’ off the top (signing) to wiser model of a small partial fee at the signing and balance upon sucessful completion of paying off the loan. The banks should of been under a performance bond system. Actually paying penalities for non-preforming loans instead of collecting late handling fee, loan modification attempt fees, loan modified fees, FC proecessing fees, FC selling fees…. The get paid first and if the deal goes bad, the taxpayers will bail the banks out must go or the USA will be gone.
   2. wheresthebeef November 25, 2009 at 9:36 pm

      It’s always good to fatten up the sheep before the slaughter. And you are correct…2010 will be ugly.
      1. avobserver November 25, 2009 at 10:41 pm

         in the spirit of Thanksgiving let’s call it fattening up the turkey before the slaughter…

         I think a shopping mall in modern days does seem to serve the same function as the church would do 200 years ago. I know quite a few people who would hit the mall when they are bored or experiencing emotional “low”. And a little shopping spree always provides the mental “lift”.
4. BeachRenter November 25, 2009 at 7:42 pm

   A short sale with a not-so-short price. We have come a long way when the short sale prices are not very alluring. This is a tract house – Doesn’t mean it is bad, but at $1.25 mil you better offer a little something extra. The problem, at least for me, is that so many large houses (4000-5000 sq. ft.) were bult in the last 5 years that they command such a high price due to the price per square foot equation. This can’t hold up much longer because even though they offer “More for your Money”, nobody can afford the total cost. I look forward to the day we scrape the McMansions to build efficient 2500 sq ft. homes.

   Happy Thanksgiving everyone
   1. movingaround November 25, 2009 at 9:00 pm

      yes!! I agree – I get so frustrated with the fact that around here homes are either 1500 sq ft or 3000 sq ft – where are the 2000 sq ft homes that fit a family of 4 nicely???
5. escrowbear November 25, 2009 at 8:16 pm

   I heard this house has multiple offers on it but the agent is not submitting them to the bank. My guess is that he is waiting for someone to overbid for the house with an all cash offer or something.
   1. IrvineRenter November 25, 2009 at 8:20 pm

      I never considered that gambit….

      If the lender tells the listing agent to get an all-cash offer or a quick-close over a certain price, they can hold the property on the market longer than the few seconds it gets on the auction block. Longer exposure makes for higher bids and better recovery. If they fail to get the offer they want, they can let it go into foreclosure and take what they can get. It would be an effective loss mitigation procedure.
   2. buster November 25, 2009 at 11:34 pm

      Multiple offers. Oh, yeah, right. Here’s another one: $35,000. That’s about what it’s worth. Gee, now they can say they “Just got another offer in today.” Everyone knows housing is off 40% from peak, so let’s take $1,441,000 x 60% = $864,600 less another 15% for the upcoming drop $734,910.

      Multiple offers – yeah, right.
6. IrvineRenter November 25, 2009 at 8:32 pm

   Great read:

   In The Fed We Trust? Will The Senate Reward The Architect Of The Wall Street Bailout?

   “An institution that is too big to fail is — under any theory of a market economy — either a government entity, an entirely regulated utility or too big to exist. Now virtually every major financial institution has a virtually explicit public guarantee against failure. You argue that the Federal Reserve should have the power to monitor institutions that are too big to fail rather than breaking them up. Given the Fed’s regulatory record leading into this crisis, why should we have any faith in that notion?

   You’ve expanded the Federal Reserve’s balance sheet by $1.2 trillion. You’ve lent vast sums to private financial institutions against what you knew was dubious collateral. Others were turned away at the door. You claim that revealing who got what, why, on what terms would constitute a “takeover of monetary policy.” What does this have to do with monetary policy? How do you reconcile the Fed’s secrecy and powers with the Constitution?”
   1. Alan November 25, 2009 at 8:43 pm

      Isn’t the obvious conclusion that the Federal Reserve now heads the list of “too big to fail, and too big to exist”?

      Or make it a government entity or entirely regulated, I suppose, in principle …
7. cara November 25, 2009 at 8:48 pm

   On this thanksgiving I just want to send a little thanks to Larry.

   We’re under contract on a house. An honest to goodness single family home, on 0.29 acres, screened in porch, franklin stove in the finished half of the basement. Move-in ready for $402k. (DC area)

   Yes, prices may go lower, but on a home that we’ll happily stay in for 20+ years and be able to expand as needed, the interest rates make this a great time to buy. We can afford it on one income.

   So, thanks Larry for all the education and entertainment while we squirreled away enough money for 20% down on a SFH, rather than settling for something that would have been cheaper, but that we wouldn’t have loved.
   1. IrvineRenter November 25, 2009 at 8:58 pm

      Congratulations! I hope you enjoy your new home.
8. IrvineRenter November 25, 2009 at 9:00 pm

   Another good read:

   U.S. Economic Recovery and the Housing Sector Mirage

   U.S. perma-bulls were once again giddy Tuesday morning with the latest reading on “existing home sales,” which spiked to an annualized rate of just over 6 million units. However this comes only days after a piece of much gloomier news, which (naturally) was ignored by the media propaganda-machine.

   One in seven U.S. homeowners with a mortgage are either delinquent on their mortgage payments, or already in the foreclosure process. Thus, we are presented with data that more people are buying homes in the U.S. but less people are paying for them. Surely it is evident to even the most obtuse market-observer that it is irrelevant how many people are buying homes if they can’t afford to make the mortgage payments.

   The U.S. housing market has gone from bubble-and-bust to a game of “musical chairs,” where title to properties flips back and forth from “homeowners” to financial institutions – with the “homeowners” unable to make payments on their homes (while they hold title), and the banks refusing to write down these “assets” once they take possession (and this is called a “recovery”).

   Even with all the “mortgage-modification” schemes of the various housing band-aids, five out of six homeowners who become delinquent on their mortgage eventually suffer foreclosure. Even with this new spike in sales, with only 30% of properties sold being distressed properties, this would work out to only 1.8 million distressed units being sold in an entire year.

   Foreclosures alone exceeded that amount in just the last six months – and this leaves out all the repossessions and “short sales”, which amount to well over 1 million units per year, by themselves. What this means is that even with the increased sales, unsold inventories of homes continue to soar, while the “foreclosure pipeline” continues to increase in size.

   Thus, in the real world, the massive “overhang” of inventory continues to grow, and is currently at its highest level ever. Official “inventory” statistics which pretend that inventories are falling are nothing but exercises in wishful thinking – where the publisher of such numbers must make a conscious effort to avoid noticing the massive, actual inventories.

   Those who would like to believe the propagandists are presented with this contradiction. The same talking-heads who now regularly compare the current U.S. economic collapse to the “Great Depression” are trying to tell people that the “Great Recession” ended after less than two years. This supposed “recovery” comes with the U.S. economy now totally dependent upon consumption – whereas during the (first) Great Depression, the United States had the world’s largest and most-productive manufacturing sector.

   During the Great Depression it would have been plausible for the economy to “recover” even if employment, housing and consumer spending were all still in decline (as they are in the United States, today). However, the current U.S. economy is built entirely atop a housing-bubble, and a level of consumption which can only be maintained by ever-increasing consumer debt.
   1. newbie2008 November 25, 2009 at 9:37 pm

      Thanks Larry for another year of RE eduction and laughter.

      The cheerleaders should of reported “Rate of mortgage late payment rate increase drops and is only one in seven.” The facts would have been hidden in the verbage or garbage and they could later claim complete and accurate reporting.

      If you spend more than you earn, how can you be saving? The USA must either spend less or earn more–produce more or do both. And I don’t mean services ecomony which is just family A’s washing laundry. Net production is unchanged in that service economy. No more internet publishing/advertising service accounting of the 1990’s.

      The house is very nice looking. Looks it could be broken down to $200 per sq. ft ($620000) house plus $7588,000 for the 7100 sf lot. High for both. the Redfin 2008 property tax is at $21,048, which translates to 1.7% tax rate. It’s very conviently located 2 miles from the dump. Good thing it located upwind.
9. Geoffrey Chaucer November 25, 2009 at 9:32 pm

   “This Beautiful Juliet’s Balcony Home…”

   O Equity, Equity, wherefore art thou Equity?
   Deny thy refi and refuse thy ARM;
   Or if thou wilt not, be but sworn my love
   And I’ll no longer be a HELOC abuser.
   1. tenmagnet November 25, 2009 at 9:45 pm

      Beautiful!
   2. badcandy November 25, 2009 at 10:47 pm

      lol. Nice work.
10. John November 25, 2009 at 9:35 pm

    Appreciate anyone answering this:

    1. In a short sale, the house owner still has to pay the mortgage until the sale finalized. Is this correct?

    If correct, then it makes sense for the banks to drag out short sale process as long as possible and milk the home owner to the last drop.

    2. If the house owner stops paying the mortgage, and the bank intentionally delays foreclosure to avoid write-down, then who service the loan and wouldn’t this also consider a loss on the bank balance sheet?

    Or if the loan is sold as CDO’s, wouldn’t the investors also loose and force the loan servicers to foreclose?

    My point is the banks also incur loss by delaying foreclosures!
    1. SanJoseRenter November 27, 2009 at 6:42 am

       John: Yes, your points are correct.

       The reason the banks are delaying foreclosures and auctions is to delay realizing the losses as long as possible.

       If banks like BofA booked their real estate losses now, many would not meet their capital requirements ie. fail their stress test and/or get shut down.

       So government regulators don’t want banks to “book to market” – that would pressure FDIC, etc.

       So we have “book to fantasy” instead, and taxpayers are slowly bled to prop up banks and Wall Street.

       See Japan in the 90s for similarities.
11. Kitty November 25, 2009 at 9:39 pm

    My fiancee and I had gone to the open house for this place back in October. It was originally listed at a cool 1.3 mil and had been on the market for most of 2009. (200+ days) It had been rented out the majority of that time while still being listed for sale. It’s a great house with plenty of room and yes… a great kitchen 🙂 At that price though, I’d rather see what we could get in a place like Colorado.

    Thank you IR for all the real estate info this year and the years past.
12. newbie2008 November 25, 2009 at 9:52 pm

    John,
    The banks collect a late fee from the investors when the borrow is behind in payment. Fee are also collected upon filing FC, etc.

    The short sale is conditions for a short sale is negotiable. If the borrower is current, the banks may milk the borrower and request he bring cash to the table. Some have not paid for months and will not bring money to the table if it a purchase loan.

    The delays in sales are mostly to keep good looking books and not to appear insolvent. For your #2 questions, it may need to be declared until the property actually sales, so mark to fanantsy rules apply to pricing the house.
    The banks are trying and quite offen getting the govt to assume the loss. The best method is to sell the house at inflated price with nothing down or only 3.5% down using a GSE loan. Loan or non-payment are now the govt problem. With 3.5% down on FHA loans, the “buyer” has almost nothing to lose with 18 Months free rent and walk away. BO has flowed the JWB plan, and the BC plan of kicking the can down the road and left the taxpayers and savers holding the bag.
13. AZDavidPhx November 25, 2009 at 10:05 pm

    How long can they keep the fiction going?

    http://www.crackthecode.us/images/superman-poster-hands-of-greed.jpg
14. Marc November 25, 2009 at 10:10 pm

    I think the shadow inventory behavior should be brought up during the banks’ annual meetings or as part of a litigation law suit. As a shareholder, I don’t want my bank to engage in real estate speculation by sitting on assets ready to be sold speculating on the market to recove. I would buy a real estate company, not a lending company, if I wanted to speculate in real estate. This is a violation of the mgmt’s fiduciary duties towards its shareholders. There must be a way to force the lenders to release the shadow inventory. Any lawyers? Let’s do a class action law suit, maybe one of the law firms takes it on for free (based on a success fee).
15. avobserver November 25, 2009 at 10:24 pm

    “Whenever there is a problem with a loan: defer. Their entire strategy is to delay dealing with the problem until appreciation bails them out.”

    This somehow reminds me of Samuel Beckett’s wonderful play “waiting for Godot”. And I would rename the two tramps (Vladimir and Estragon) “too-big-to-fail-lender” and “I-want-my-mcmansion-homedebtor”. Everyday they wander around spewing gibberish and asking when Godot (you know that elusive housing recovery) is going to arrive.

    Perhaps we give them way too much credit when we liken lenders to a cartel. Real cartels such as OPEC have direct control on production and supply. The only control these lenders have is the speed of release of foreclosure inventory for the time being, and even that will diminish over time as bad loans continue to surge. It’s ironic that the very act of extending and pretending by the banks would further constrict their ability to lend to the real economy, and eliminate any chance of a robust recovery, rising wages and future housing appreciation. At best all they can possibly accomplish is to turn a 5-year market crash into a 10-year (or more) death-by-a-thousand-cuts slow decline.

    The RE market has been like a hot air balloon and after many years of floating up high many people forgot what kept it up there. Over the time they either forget or begin to doubt the existence of gravity. I think 2010 will be the year for many people to “re-discover” gravity.
16. Orangerenter November 26, 2009 at 1:04 am

    Anyone see this yet?

    http://www.nypost.com/p/news/local/judge_kos_mortgage_to_slap_bank_28ZS1oW8Y58z6gu1AQbWMI

    Judge blasts bad bank, erases 525G debt:
    A Long Island couple is home free after an outraged judge gave them an amazing Thanksgiving present — canceling their debt to ruthless bankers trying to toss them out on the street.

    …The bombshell decision leaves Diane Yano-Horoski and her husband, Greg Horoski, owing absolutely no money on their ranch house in East Patchogue…

    …In 2004, court records show, they refinanced, paying off their original mortgage with part of a $292,500 sub-prime loan from Deutsche Bank. They used what was left for health care and for his business.

    RUTHLESS BANKERS? I BET HE WAS JUMPING FOR JOY, THANKING THE “BANKER” WHEN THEY GAVE HIM $90,000+ CASH-OUT. MAYBE RUTHLESS BANKERS SHOULD JUST GIVE UP AND STOP LOANING MONEY TO PEOPLE FOR CARS, COLLEGE, HOMES, ETC.

    THIS REALLY SETS THE PRECEDENT. LET’S ALL CELEBRATE BY STOPPING PAYMENT ON ALL OUR DEBTS AND LET THE GOVNM’T “WIPE IT OUT” FOR US (WE GET TO KEEP ALL THE STUFF THOUGH, RIGHT?).

    MAKES MY SICK.
    1. IrvineRenter November 26, 2009 at 1:16 am

       When you think about it, such a result (widespread principal reductions) would end our lending problems because it would end all lending. When the less you pay means the less you owe, you probably will try not to pay very much; you might even default….
       1. Gemina13 November 27, 2009 at 9:38 pm

          Well, I don’t have much sympathy for OneWest. They lied and said the owners owed twice what they did on the house, and threw in an additional $45K in taxes that had already been paid. As far as I’m concerned, this is the kind of lender that needs to be kicked, if not dragged, out of the lending business.
    2. wheresthebeef November 26, 2009 at 1:21 am

       That truly is disgusting. These jokers took out a sub-prime loan and were surpised that the bank wanted to thrown them out of the house after they quit paying.

       In current society, there are no consequences for making bad decisions (at all levels…joe six pack to AIG and GM). We are all doomed until this changes.
17. IrvineRenter November 26, 2009 at 1:12 am

    Great advice. No wonder the State of California is ditching these guys. BTW, what happens when our underfunded pension obligations blow up?

    Calpers Said to Reconsider BlackRock as Adviser

    “The California Public Employees’ Retirement System is considering giving BlackRock, its real-estate adviser, the heave-ho after the firm steered the pension plan into an investment in Stuyvesant Town and Peter Cooper Village, a pair of gigantic Manhattan apartment complexes now considered one of the biggest real estate flops of the boom, The Wall Street Journal reported.

    At the height of the real estate bubble in 2006, an investment group led by New York City real estate firm Tishman Speyer Properties and BlackRock Realty Advisors paid $5.4 billion for the pair of complexes.

    BlackRock then advised Calpers to sink $500 million into complex, which real estate analysts now say could be just two to three months away from a likely default.

    Because of the investment, there’s “a strong possibility” that Calpers, whose real-estate portfolio was down 48 percent in the latest fiscal year, will get rid of BlackRock as its real-estate adviser, The Journal said, citing a person familiar with the fund’s thinking.

    Brian Beades, a BlackRock spokesman, told the newspaper the company does not comment on its clients. “
18. newbie2008 November 26, 2009 at 10:51 am

    The buck stops at the pension plans.

    If US management was responsible to the shareholder, we would not be in this pickle. It was all about jacking up the stock prices with short term results while killing the pipeline. Stop R&D and the net will go up in less than a quarter, but the company’s future will be flushed down the toilet. As long as management is kept in corporate socialism and getting their juice especially with poor fiscal results, the bubbles will continue and US industrial base will be diminished and eventually die.
19. Homer November 26, 2009 at 8:58 pm

    House is under contract now! This post must have scared em!
20. Homes Alexandria VA November 27, 2009 at 2:25 am

    That is one stunning looking home. I love the kitchen photo.

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